Exploring cloud journey with strategic thinking and adaptable technology

 A blog post by David Linthicum, chief cloud strategy officer, Deloitte Consulting LLP and Diana Kearns-Manolatos, senior manager, Deloitte Center for Integrated Research

The journey to cloud has accelerated in the past two years. As businesses digitally transform and move toward Agile with pod-based teams, it is crucial to focus on strategy-driven models that leverage technology as a force multiplier. Organizations developing long-term digital strategies need to ask business-driven questions, refer to a common language that transcends functions, and engage transformation accelerators to quickly progress digital transformation to thrive and drive value.

Ask the right questions

Cloud, artificial intelligence, cyber, edge computing, Internet of Things—each of these technologies is continuously evolving. To leverage them, it is critical to understand today’s business strategy aligned with an overarching vision. At the same time, companies need to remain flexible so that as contexts change, aligning the appropriate technology becomes more manageable.

We’re currently observing a pattern related to digitization and digital transformation where companies tend to start technology strategy discussions anchored on a particular technology. They know digital requires a strong technology capability, and so they often start there. This is, in part, because business leaders speak a different language from technologists and vice versa. The lack of a common language makes it difficult for leaders to find the right entry point for strategic conversations.

Whether digitizing an existing process or undergoing full-scale digital transformation of an existing business process, it is essential to begin with strategy. This starts with asking the right questions that then proceed to change minds and processes. In a technology environment, what is usually discussed is the artificial intelligence or cloud strategy that should be used. However, for business strategy-led change, the underlying question should be, “What are we trying to achieve for the business?” This question establishes a common ground for a cloud architect to understand the business needs and downstream requirements for the technology estate. 

Use a common language

In our recent Deloitte Insights research, “A new language for digital transformation,” we discuss five digital imperatives that make space for paradigm thinking—which distills conversations to strategic themes in a flexible way. These imperatives help develop a common language for business strategies and technologies, to allow digital transformations to break down silos between business and technology leaders and to build tech strategies that can better adapt to the needs of tomorrow.

1. Experiences: Take the metaverse, for example. Rather than be led by a technology hype cycle, instead focus on clearly defining your company’s strategic goals related to creating compelling user experiences. When the discussion is centered around the value for the client or stakeholder, the experience takes precedence and selection of the right experiential technology follows.
2. Insights: It is essential to understand what automation, data, research, and insight goals the business has and whether there are pain points to be solved or information required for decision-making. A clear insights strategy can create a common understanding of the business needs for insights to develop the appropriate technology strategy to deliver these insights. The key is to not start with technology but with strategy.
3. Platforms: Platforms refers to the location and management of cloud, Internet of Things, and edge, among other technologies across the organization or the network. As part of their digital transformations, many organizations are exploring platform modernization. Platform requirements should equally be based on business requirements related to who needs to access the information on the platform, for what purpose, and at what speed, to begin to create the right technical architecture.
4. Connectivity: From a technology perspective, connectivity focuses on the broadband, 4G, and 5G technologies. It is closely related to platforms, and from a business standpoint, it refers to understanding the business requirements around the flow of information. It transcends not just the organization but also its entire ecosystem.
5. Integrity: This focuses on advancing security, analyzing the business side for organizational purpose, and understanding business needs. From a technology perspective, it can include cybersecurity or processes like DevSecOps. These help to establish the organization’s integrity goals. 

These imperatives drive the conversation around strategy and focus on the business value that should be delivered from the technology. They further allow a more human conversation to trickle down through business functions, with the technology used as a medium to enable that strategy.

Accelerate strategy and change with industry clouds

Once organizations have a clear strategy, industry clouds can be a powerful accelerator of digital transformation. While they are not new and have been around since the early 2000s, when there were more than a dozen public clouds on the market, as the market has matured and evolved, today’s three big cloud hyperscalers are now investing heavily in them. This pivot toward “verticalized clouds” narrows the focus to offer customized digital capabilities and components for sectors like health care, manufacturing, and financial services, among others. The pandemic created a newfound urgency around the speed to digital, and industry clouds helped digitize business capabilities for remote work, e‑commerce, supply chains, and more.

Industry clouds serve as digital transformation accelerators and enable a new buy-build equation. Per our recent research, industry clouds could potentially become a $640 billion market over the next two years. With a modular approach, businesses have a significant opportunity to take advantage of this technology.

Industry clouds can accelerate change in a way that taps into 21st-century digital blueprints, high-tech capabilities, and a co-creation ecosystem. In this way, companies can more quickly digitize or digitally transform their businesses with a shared operating model, with a focus on reinforcing co-creation and Agile with pod-based teams. Businesses can work with cloud providers and systems integrators to bring together the full force of the ecosystem. This can include, for example, regulatory and compliance considerations—the more infrastructure-as-a-service that the business has with the industry cloud, the more the responsibility falls on the cloud provider as part of the shared services model.

The right questions, a common language, and accelerators can drive strategic value

When developing and implementing digital strategies, it is crucial to be value-driven. However, many organizations struggle to understand, measure, and optimize the value they get from their technology estate and investments. Starting with strategy can help organizations to ask the right questions and avoid getting stuck in technology hype cycles that anchor on a single technology or preferred architectural pattern. A common language can help join stakeholders across leadership with that shared vision, and industry clouds can help bring together the full force of the technology ecosystem to execute against it. When done right, companies with a mature capacity to change and ability to win—that is, exponential enterprises—are 176% more valued and 30% less volatile. Organizations can and should strengthen the link between business strategy and technology to deliver optimum value. 

Learn more about this topic by listening to our On Cloud podcast by David Linthicum